|This page is full of tools and information that I developed and give away, and some secondary references that I think
are terrific. You are free to download and use my materials at your own risk. I will keep making additions to this page,
and continue to adapt these materials, which are often speaking outlines, as stand-alone curricula.
Fully working budget
adaptable; free of charge
|This is a multiple cost-center budget model Excel template, set up for five programs and two
supporting functions with full staff-effort-based allocation of shared costs and complete trail back
to line item definitions. Note the use of the Names tab - color coding indicates what is an input; if a
field is filled in with black type it is probably driven by the centralized names tab. This allows the
user to rapidly rename cost centers and line items as is useful. The Model attached has sample
data in it, including a Notes tab through which a budget manager keeps track of changes between
iterations of the budget.
There is also a matching written Cost Allocation Policy
|When Worlds Collide:
GAAP v. TAX
Will a purist view of
GAAP get you in TAX
|Attached is the outline of the most recent version of a presentation I enjoy making on issues in
GAAP v. Tax, a current passion of mine. Many groups are advised by someone strong in GAAP
(Generally Accepted Accounting Principles - the rules CPAs use in audits), or strong in Tax law,
and unaware of the strategic issues from the other side. This outline hits major controversies and
common errors I see, and contains cites to technical GAAP and TAX sources to illuminate some of
these issues. I presented this most recent version at the May 2006 OSCPA Statewide
Not-for-Profit Conference in Portland; very similar versions at the AICPA and the Northern California
CalCPA lunch groupo. You attached. (Disclaimer: GAAP cites are in old SFAS 116/117 format not
yet the new and improved and Kafkaesque [somewhat inaccessible] ASC...sorry! Sooner or later I
under the 501(h) Election
|Internal Revenue Code Section 501(h) defines expenditure limits for eligible public charities that
elect to be governed by Section 501(h) rather than the default test ("insubstantial part"), which is
much less objective. This presentation (BIG file 1.7MB) summarizes calculation steps and
suggests a number of advanced strategies as a way to make 501(h) come alive, since in my
experience practitioners learn the rules, but remain gun-shy about how to implement them. For
charities that lobby, experts are nearly unanimous that 501(h) is the way to go; in fact, experts are
puzzled as to why so few charities have elected 501(h).
Background article on
commerciality & tax
|This is an article I wrote as a chapter in Andy Robinson's book Selling Social Change (Without
Selling Out), entitled: Unrelated Business Income and the Tax Implications of Earned Income.
This was my final draft before the book editors worked it over. Andy was so kind in asking me to do
it for him! He is a development person allowing a tax person to write technical stuff that's a little
pessimistic, (which means he's a responsible development person and you should hire him.)
And not least, he got me listed with my first and only ISBN number!
This article is my best effort to describe the history of the commerciality principle for tax-exempts,
and the rules about, and exceptions from, taxable unrelated business income. Social Venture
people seem to all recommend earned income strategies to my charity clients. I believe earned
income is a good "leg" on the diversified "stool" of a group's income planning, but tax law for
charities places more value on contributed income than earned income. I also believe our groups
do not have the management horsepower, generally speaking, to run a business as well as their
|Spotting Problems in
Ethical Grey Areas
& What to do?
|These materials are from a session Julie Floch (a New York City exempt organizations CPA whom
I adore, and who practices on both sides of the "gaap/tax divide"; in my private list of the world,
Julie is alongside Sigourney Weaver as rockstar heroines!).
Our goal with the session was to provoke thought about identifying and stopping the kind of
unethical practices that may not break any law or regulation, but if written up in a newspaper by a
skeptical reporter, would be a tremendous embarrassment to the target nonprofit, and further
weaken our sector.
Our thesis is that the bad actors who've been caught, sometimes had genuinely and completely
lost sight of how things would look under the harsh glare of public attention. Had they lost their
moral compass? Some threads seem to emerge as we explore this area: founder's syndrome
and other cases where the boss just cannot tell himself or herself apart from the charity or entity
and cases where the CEO feels under class pressure to "keep up with" the often-wealthier donors
and board members. One great example was the recent American University scandal that is still
playing out. Another way these ethical grey areas set themselves apart in my mind arises from
Gerald "Gerry" Zack's recent book Fraud & Abuse in Nonprofit Organizations. Zack differentiates
three types of cases: insider perpetrator on the organization, outside perpetrator on the
organization, and the organization as perpetrator on the public interest. I think the grey areas we're
trying to highlight are often at the intersection of Zack's first and third types, which is precisely what
makes them so dangerous in the press.
The idea is that we finance staffers, auditors, board members, too often "go along to get along"
and if there's something we have to do or approve in our work that makes us feel a little "icky," by
golly NOW is the time to bring it up internally and get it dealt with, even if that's awkward. The
Sector is under pressure.
This is the slideshow, and the supplemental materials (some clippings and one study).
Property or Services
|The rules about accounting for donated property and services are clear, but many groups and
professionals are confused, or find it too difficult to do the necessary work. Some gifts are
reportable on GAAP financial statements but not on Form 990. These two files are an explanatory
memo and a table showing the differences. Gifts In Kind a/k/a Donated Property, Services &
Facilities: memo, and 3x3 table.
|An Optimistic View of
Tom Silk on California's
Nonprofit Integrity Act
|In this article, Rational Exuberance: An Exploration of the Adaptation by California's Charitable
Sector to Changing Governance Standards, leading tax and corporate attorney Tom Silk writes
thoughtfully and optimistically about charity adaptations to public calls for improved accountability
and transparency. Subtitled "Notes from the Field" it is a remarkably clear and pleasing take on
the current situation with not only California legislation, but proposals from the staffs of the Senate
Finance Committee and the Joint Committee on Taxation (both Federal) and the first round of
response from the Independent Sector led "Panel on the Nonprofit Sector."
the historical view
When is strong
advocacy still charitably
|table of contents, working backwards from the Tax Regs through the interesting courts that led to
the definition that “An organization may be educational even though it advocates a particular
position or viewpoint so long as it presents a sufficiently full and fair exposition of the pertinent
facts as to permit an individual or the public to form an independent opinion or conclusion. On the
other hand, an organization is not educational if its principal function is the mere presentation of
unsupported opinion.” It's more interesting than you think: you can read the appellate courts slap
down the nazis and support the lesbians! (Literally.)
You can also download the IRS CPE Text (legal briefing for auditors on the issue) on the subject.
|Materials & Downloads